Even with the crypto bear market in full swing, it is hard to ignore the fundamental developments in Proof-of-Stake (PoS) blockchain environments. Most notably, the Polkadot ecosystem, a brainchild of Ethereum co-founder Gavin Wood and now run by the Web3 Foundation has stood out over the past two years. Currently, there are over 27 parachains on Polkadot, with 11% of the total supply of DOT tokens locked in parachains and crowdloans.
But before diving into the outstanding projects that are building on Polkadot, it is worth noting that this PoS network is quite different from the average smart contract blockchain. Unlike Ethereum, Polkadot touts itself as a Layer 0 blockchain, thanks to its relay chain which acts as the base layer. Meanwhile, Polkadot’s signature parachains are distinct blockchains that run in parallel while achieving consensus and security via the network’s Relay Chain.
Given its underlying architecture, Polkadot has gradually become a darling to crypto innovators in search of interoperability solutions. The big question, however, is which projects stakeholders ought to follow closely? In this article, we will break down four Polkadot-based projects that are worth crypto natives’ time based on their fundamental value proposition and overall growth.
Acala is a DeFi network on Polkadot powering the aUSD stablecoin; this layer-1 parachain is scalable and allows developers to leverage the full power of the substrate infrastructure while accessing other smart contract blockchains such as Ethereum. Most importantly, the aUSD token is designed as a decentralized stablecoin backed by several assets, including DOT, DOT derivatives and other cross-chain assets like ETH or BTC.
So, how exactly is aUSD of value to DeFi users? This stablecoin can be minted by placing a Collateralized Debt Position (CDP) using accepted reserve assets; DOT, Acala, BTC and Ethereum-native assets. Once minted, the aUSD stablecoin allows DeFi users to access a wide range of products, both on Polkadot and other interoperable blockchain environments like Ethereum. All without relying on cross-chain bridges or wrapping the aUSD tokens.
So far, Acala has received and completed 3 Web3 Foundation grants. The project also enjoys the backing of over 35 investors, alongside 1608 commits on github. It is currently one of the biggest stablecoin innovations in DeFi, competing with the likes of MakerDAO’s stablecoin, DAI.
t3rn is another Polkadot-based innovation that is solving a major challenge in DeFi; smart contract interoperability. By design, the t3rn ecosystem offers a frictionless multi-chain smart contract hosting environment, featuring fail-safe mechanisms to guarantee successful executions. What’s particularly interesting about t3rn is the platform’s registry, anyone can contribute to its open-source repository and choose to get remunerated whenever their code is executed.
As you can see from this infrastructure, t3rn’s approach to open-source development is tailored on collaboration and fair rewards for the developers who wish to contribute. But above all, the platform’s native features of interoperability, fail-safe mechanisms and composability open up new possibilities in the development and execution of smart contracts. Imagine an interoperable DeFi platform where code can be re-executed on the Circuit, not to mention the ease of designing new smart contract ecosystems.
Like Acala, t3rn has had its fair share of success, the project recently raised $6.5 million in a strategic funding round led by Polychain Capital. Other notable investors who participated include Blockchange, Lemniscap, D1 Ventures, Huobi Ventures, Figment Capital and Bware Labs.
Raising funds in any market has never been easy; the Polkastarter DEX changes this narrative by enabling DeFi projects to raise capital through cross-chain token pools and auctions. Founded in 2020, Polkastarter was launched as a permissionless DEX on Polkadot to provide a decentralized launchpad for blockchain projects at a cheaper expense compared to centralized markets.
However, unlike Uniswap’s IDO/IEO model, Polkastarter introduced a fixed swap auction model for native tokens issued at the initial supply. This means that DeFi projects in search of capital can launch a token on Polkastarter and create cross-chain token pools at a fixed purchase rate for tokens. The swap pools are designed to keep the token price stable during the sale until the initial supply is purchased.
As of writing, the Polkastarter DEX has enabled the funding of 111 ideas, totaling $49.7 million in raised capital. It is also noteworthy that the sales span across several blockchain networks, including Polkadot, Ethereum, BNB chain, Polygon, Avalanche, Celo and Solana. On December 15th, Polkastarter will be hosting an inaugural Web3 gaming awards event dubbed ‘Gam3 Awards’.
Moonbeam is an Ethereum-compatible parachain built on the Polkadot blockchain. Ideally, this specialized Layer-1 chain mirrors Ethereum’s interface, allowing Polkadot users to leverage tools such as Metamask, Truffle, Waffle, Hardhat and Remix. The ultimate goal is to enable a DApp environment where solidity smart contracts developed on Ethereum can be used on Polkadot with minimal configuration changes.
With both Ethereum’s and Polkadot’s DeFi hub showing strong signs of resilience, Moonbeam has positioned itself as one of the DeFi innovations to watch in 2023. As it stands, this Polkadot-based project has received and completed two Web3 Foundation grants and enjoys the backing of 16 investors. In addition, there are over 1627 commits on github, with a total of 32 contributors who are currently active.
Despite the uncertainty in crypto markets, fundamental development is still going on; think of it as the wheat being separated from the chaff. Value-oriented blockchain networks such as Polkadot will certainly bounce back once the dust settles. This being the case, crypto stakeholders who are in the game for the long term ought to be scouting for the next gems. The few projects highlighted in this article are just some of the examples, a whole lot more is in the works and will be appreciated in the next bull market.